There are hundreds of marketing metrics and several ways to manage marketing, especially in today’s technology, where there is more data to analyze. All of this can feel exhausting for marketers however, for most senior leaders and CEOs, the numbers they care about most are the ones directly linked to revenue.
It can be difficult to differentiate between the important marketing metrics and the not-so-important ones. The right information can help CEOs understand precisely what factors are working, what factors are failing, and what the organization can do to improve. So, which metrics matter most for CEOs and senior leaders?
Here are some metrics the FunnL marketing team has found most useful over the years and encourage them to share with their CEOs regularly.
1- Lead Volume Per Source
This primary metric is still crucial to measuring the success of your lead generation programs and deciding where to invest your marketing budget. Are most of your leads coming from digital campaigns, trade shows, or search engines? Sometimes it becomes challenging to identify where new business leads are coming from; this metric will help your CEO understand how to invest in marketing in the future.
2- Close Rate
Knowing the number of customers received from your marketing leads will indicate the effectiveness of your lead-nurturing programs. Are you bringing in the right type of leads that will ultimately turn into clients? Or are you generating a bunch of leads that end up wasting the time of your sales team?
Preparing the close rate metric will not only help your CEO identify the number of leads you need to hit revenue goals, but it will also help you understand how you can support sales to improve the close rate over time.
3- Customer Lifetime Value ( LTV)
20% of repeat customers account for over 80% of business profits, which just goes to show how important long-term customer relationships are, according to research group Gartner. If we look at today’s current scenario, companies are forced to give more resources to client servicing and maintenance programs. The productiveness of these investments is clearly shown through the lifetime value metric.
The easiest way to calculate the LTV is by taking a sample of customers, and recording their average spending over a set period, minus the gross margin. Divide this figure by your retention rate over the period (subtract the number of customers at the end of the period, from the number of customers acquired during the period, and divide by customers at the start of the period). Divide the resulting LTV figure with your Customer Acquisition Cost (CAC), and you can compare the value created by the customers over the period, versus the cost incurred to acquire them.
When the value is greater than three, it indicates the high ROI on customer investments.
4- Customer Acquisition Cost (CAC)
Customer Acquisition Cost means the average cost of acquiring a new customer. It is estimated by dividing the total marketing and advertising costs (including salary) incurred over a specific period, by the number of customers acquired over the same period. With the arrival of user tracking tools, it has become easy to relate the number of customers acquired to a specific marketing expense that follows a prospect from lead to revenue.
CAC provides the most effective estimation of investment against return, giving you the actual revenue created by the company’s marketing efforts for the CEOs.
5- Website Traffic
Did you know, website traffic gives you information about the success of your marketing efforts? Of course, without context, a click will not tell you anything about the purchasing plan of the user. But the interesting part here is if you can follow your visitors based on traffic sources then you will be able to develop a much more precise image of which investments are generating the return.
And if you want a clear path to creating conversions then find out whether your prospects come to your site via an organic search engine result, a paid advertisement, a social media link, an email referral, or a Youtube video.
6- Time to Close
Everyone is interested in decreasing the sales cycle because they know the longer it takes for someone to make a decision, the less likely they are to buy. Setting a baseline for your time to close a sale will give you an idea of how long it takes, on average, to close with each customer. Then your sales and marketing teams can begin working together to identify strategies for expediting the sales process.
By using these metrics you can provide your CEO with insights into a prospect’s decisions within the sales cycle and spell out exactly what’s driving revenue. You can identify both problem areas and potential opportunities.
The solution to marketing success lies in your ability to understand how your efforts contribute to your organization’s bottom line. Once you prove the value of your initiatives, your team will receive well-deserved credit. Contact us today to learn how FunnL can improve your B2B marketing campaigns and deliver sales qualified leads for clients and implement expansion plans and take the services to new territories.